Photo: The world’s richest man, Carlos Slim, and his family.
Today the Forbes rich list is out and some of us may have spent a
few idle minutes pondering the good we could do to ourselves and others with a
few billion dollars at our disposal. It is not an easy exercise if you have not
even reached your first million — and possibly never will — but it is billionaires
who are setting the standard for wealth and philanthropy these days. There are
1209 of them in the world currently, 102 of them women.
Three things stand out from the reports
about the mega-rich:
* The greatest growth in their numbers has been in the rising
BRIC economies (Brazil, Russia, India and China) and has been fuelled by rising
commodity prices. However, these are countries with predominantly poor
populations — and no richer, thank you, for having to pay more for bread and
petrol. This takes the shine off the achievements of the new billionaires, or at least
raises the question of how they show their gratitude to the nation that helped
them rise to the top.
They could perhaps take a leaf from the book of the world’s richest
man, Mexico’s telecommunications tycoon Carlos Slim (US$74b). According to the
Washington-based Academy of Achievement, Slim’s “Telmex Foundation is one of the
largest philanthropic institutions in Latin America. In addition to activities
in health, nutrition, conservation and disaster relief, it has provided
university scholarships for hundreds of thousands of talented students who
would otherwise be unable to pursue higher education.”
Slim has also propped up the New York Times with his wealth, which is no mean act of charity.
* Much of the new wealth comes from the luxury market. That
may have always been the case for all I know, but it says something about the
sincerity of our collective concern about the dire poverty that still afflicts
around 1.7 billion people around the globe. The fourth richest man in the world
is Frenchman Bernard Arnault, whose wealth grew from US$27b to $41b in the past
year based on the Luis Vuitton, Moet and Hennessey brands, which apparently are
going down well among the newly rich from Mumbai to Shanghai. Facebook
billionaires have risen to six, thanks to the hundreds of millions of us who
have the luxury of time to socialise on the internet. And then there are the countless
gamblers who have driven the fortune of US casino magnate Sheldon Adelson from
$14b to $23.3b. No doubt these contemporary Croesuses have done their bit to
wind back the recession, but it is hard to see how they have made the world a
better place. Facebook excepted. Perhaps.
* The good news is that there is generosity among the staggeringly
wealthy. According to Forbes, Bill Gates — long the richest man in the world
— would still have been first on the list (as he was for many years) if he had
not so far given away $28 billion of his wealth to his foundation, for which he
works. Warren Buffet, who comes a close second to Gates, pledged in 2006 to
give away 99 per cent of his wealth to the Bill and Melinda Gates Foundation
and family charities. He has so far given $8b to the Gates Foundation. We might
not all agree with everything the foundation funds — birth control, for
example — but it does give serious help to some good causes.
The woes of the very
rich – and solutions
Probably all of the billionaires give something away — how
could they sleep at night otherwise? Researchers at Boston College’s Centre on
Wealth and Philanthropy say it’s not true that wealthy people are more miserly
than the non-rich, and that as individuals move up the wealth scale they give
away a greater share of their assets. In any case, no-one should feel envious
of their fortunes, because, as folklore has it, money can’t buy you happiness.
New research on super-rich Americans by the Boston College Centre shows
that they tend to be “a generally dissatisfied lot, whose money has contributed
to deep anxieties involving love, work, and family”, according to an article
in The Atlantic magazine. Perhaps that is because all but two of the 165
households in the survey had not yet reached the billion dollar mark. Despite
an average net worth of $78 million, most of them did not consider themselves
financially secure. But there was more to their discontents than that. They
worry about their self-worth, about love and friendship, and, most of all,
about their children.
Self-worth is closely tied to work, and among those who inherit
their wealth, the more sensitive worry that they will lack motivation to
accomplish anything in life or escape the shadow of their parents. They can
drift through life, without a career or purpose and become estranged from the
world. “One of the saddest phrases I’ve heard,” says psychologist Robert A
Kenny (who is involved in the Boston Centre’s research) is, “Honey, you’re
never going to have to work.” Kenny says this announcement is often made by a
rich grandparent to a grandchild, but it does not necessarily sound like good
news to the young person.
When they do work, heirs may too easily change jobs when
they hit an obstacle rather than deal with it, ending up with no career.
Wealthy people in general may not be taken seriously by co-workers, who can
view their work as a charade.
It is easy to see how friendship and love could be complicated
by great wealth — a theme often explored in romantic literature. Kenny says
issues related to money cause the failure of many marriages among the wealthy
and, further back, make it difficult to trust the affection shown by a suitor.
The “overwhelming concern of the super-rich” who
participated in the research, however, is their children. They are concerned
that money might rob them of ambition, give them a perverted view of the world,
a sense of entitlement, and prevent them from developing a strong sense of
empathy and compassion. Even if they arrange for the inheritance to be doled
out in dribs and drabs, children always know the money is there. “We try to get
our kids to do chores,” complains one parent, but it is hard to get them to mow
the lawn when we have an almost full-time gardener.” (How about making the
gardener part-time?) Controlling the flow of money can also lead to resentment
as the children grow up.
Obviously, rich parents also have to be very wise. I once
heard of a wealthy father with many children who, back in the days when colour
television was new, was nagged by the kids to get a colour set. Eventually he
obliged. One day they came home from school to find their black and white set
painted in bright colours… He didn’t want to bring up a tribe of mere consumers. A large family, by the way, seems to be part of the
solution to having too much money.
Carlos Slim also seems to have discovered the secret of not letting wealth ruin his family life. His profile on the Academy of Achievement site states: “In the midst of this staggering success, the Slim family remains an unusually close-knit one. As Carlos Slim devotes more of his time to his philanthropic enterprises, his three sons have taken the reins of the major components of Grupo Carso. And the Slim family still dines together every Monday night.”
Whatever their family ups or downs, most wealthy folk discover the satisfactions of philanthropy.
Almost all the respondents to the Boston College survey had family foundations or donor-advised funds. “Excluding
two unusually wealthy foundations, these respondents invested in an average of
$11 million in these funds, in addition to household giving,” says the Atlantic
The effects of that giving on the recipients is another
story. But the moral of this story is a rather predictable one: “Don’t work too
hard for money, because it isn’t going to get you much if you ignore everything
else,” says Kenny. Hopefully, the billionaires are listening.
Carolyn Moynihan is deputy editor of MercatorNet.